Syed Ijaz Hussain Shah and his wife, Asmat Hussain, petitioned the Tax Court for a redetermination of $18,030 in deficiencies and penalties for tax years 2009 through 2011. On the trial date, the Commissioner submitted to the Tax Court a

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" Stipulation of Settled Issues" signed by the parties. The document states that it " reflects" the parties' " agreement as to the disposition of adjustments," yet there is no mention of agreement concerning the fact or amount of a deficiency for any of the relevant tax years. At the Commissioner's request, the Tax Court granted the parties 30 days to file " decision documents" in lieu of trial. The Commissioner calculated a total deficiency of $12,252 and a penalty of $0. When the couple refused to agree to this amount, the Commissioner asked the Tax Court to enter a decision adopting the Commissioner's figures. The petitioners sought more time to produce an agreement, but the Tax Court granted the Commissioner's motion on the ground that " the parties' computations for decision and proposed decisions consistent with their settlement agreement" were overdue. We conclude that, in light of the parties' disagreement over the petitioners' liability, the Tax Court erred by entering a judgment without holding a trial. We therefore vacate the judgment of the tax court and remand for further proceedings.[1]

I. Background

The Commissioner filed the motion for entry of decision a month after the parties had submitted their Stipulation of Settled Issues. The Commissioner represented that--based on the parties' stipulations--the agency had calculated a deficiency for each tax year and mailed to the couple an " explanatory letter" along with " decision documents" and " tax computations." The Commissioner acknowledged, though, that the couple had not signed the decision documents or returned phone calls, and so the Commissioner requested " that the Court enter a decision in this case pursuant to the agreement of the parties and in accordance with the ... decision document," which was attached to the motion. Also attached to the motion was the " explanatory letter," which says explicitly that " to finalize the settlement" the parties still had to " file with the Tax Court a decision document reflecting that settlement agreement that shows the amount of tax and additions to tax/penalties that you owe based on our settlement." The letter further " advised" the couple that they " should not consider any agreement to settle this case final and binding until we have executed the decision documents and the Tax Court has entered judgment."

The couple filed an objection to the Commissioner's motion, ...

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